All About Petrol Tax in Chhattisgarh

The information in this article was last updated on 31st October 2022.

Amid the surging fuel prices, the Central Government had reduced the excise duty on petrol by ₹ 5 per litre.

Following the line, the Chhattisgarh Government also offered relief on VAT on petrol by 1% per litre.

Crucial aspects of petrol tax in Chhattisgarh are highlighted in the following segment, so keep scrolling to know more about it.

What Is the Petrol Tax Levied in Chhattisgarh?

On 21st May 2022, the Central Government reduced the excise duty on petrol to ₹ 19.90 per litre. The Chhattisgarh Government charged a Value Added Tax of 27.02% on petrol as of 31st October, 2022.

Here is this table mentioned below that summarises the essential components that sum up the price of petrol in Chhattisgarh:

Elements	Effective as of 31st October, 2022. (in ₹ per litre)
Price charged to dealers	₹ 57.35 per litre
Excise duty (levied by the Central Government)	₹ 19.90 per litre
Average dealer commission	₹ 4 per litre
VAT (levied by the State Government)	₹ 21.20 per litre {27.02% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional VAT of ₹ 2 per litre is applicable)
Retail selling price of petrol at Chhattisgarh	₹ 102.45 per litre

(Note: The above table serves only as an example to explain the petrol tax breakup, with data taken from reliable and authorised sources as of 31st October, 2022. . The actual prices, however, may vary as fuel price, dealer’s commission, cess and other such aspects change periodically.)

Who Levies Petrol Tax in Chhattisgarh?

Central and State Governments impose excise duty and VAT on petrol respectively. These taxes comprise petrol price in Chhattisgarh along with other factors like dealer’s commission, price of crude oil, etc.

What Are the Factors Affecting Petrol Tax in Chhattisgarh?

Here are some of the factors that are determining factors of petrol prices in Chhattisgarh and India as well:

1. Price of Crude Oil

Changes in crude oil’s price at the international market directly influence its prices in the domestic market. Factors such as global demand for crude oil, production rate, and political relations in countries where crude oil is being imported affect crude oil’s price and, consequently, petrol prices.

2. Cost for Dealers

Oil Marketing Companies such as HPCL and IOCL levy a charge to dealers to distribute crude oil depending on factors such as refining expenses, freight charges, etc. This price levied by them is an important factor that affects petrol prices.

3. Excise Duty and Sales Tax

The Central Government imposes excise duty, and the State Government levies VAT on petrol. Both these taxes influence petrol prices in Chhattisgarh and across India.

4. Dealer’s Commission

OMCs provide a commission to petrol pump owners, which affects the petrol price in Chhattisgarh and the entire country.

5. Valuation of Indian Rupees Against US Dollars

The crude oil is imported from the international market, and the transaction is completed in dollars. Hence, any change in the exchange rate of rupees and dollars affects petrol prices in the domestic market.

6. Demand and Supply of Petrol

If the supply of petrol falls short of the increasing demand for petrol in the market, then petrol prices will increase as per the law of economics.

Is Petrol Tax Same in All Places of Chhattisgarh?

Yes, all places in Chhattisgarh levies a similar rate of VAT on petrol. However, petrol prices may differ across cities in Chhattisgarh due to differences in dealer’s commission charged in each city.

Thus, a reduction in petrol tax in Chhattisgarh along with reduced excise duty will lower the petrol price in the state by ₹ 70 paise. This will relieve residents of Chhattisgarh from a high rate of tax incidence on petrol.

Frequently Asked Questions

✓ How much loss of revenue had been estimated by the Chhattisgarh Government after reducing VAT on petrol?

The Chhattisgarh Government would face a revenue loss of approximately ₹ 1,000 crores after reducing VAT on petrol.

✓ When did the Central Government reduce excise duty on petrol?

The Central Government reduced excise duty on petrol on 3rd November 2021. On 21st May, 2022, the Centre further reduced the excise duty on petrol to ₹ 19.90 per litre.